Friday, May 29, 2009

Developers Readying For Launches As Activity Rises

Source : The Straits Times, May 29 2009

Weekend launches include Martin Place Residences and Balcon East.

MORE developers are preparing to launch new properties in response to a marked improvement in sentiment in Singapore's property market, experts say.

Activity has picked up in the past two to four weeks, they observe.

Martin Place Residences – Photo from Frasers Centrepoint

Some developers are now rushing to prepare projects for launch, but they face some inevitable delays. They may lack promotional materials, for instance.

Starting today, Frasers Centrepoint Homes will be releasing more units at its 302-unit freehold Martin Place Residences in the River Valley area. It recently sold more than 100 units of the project after it cut prices. The units were released at $1,260 per sq ft (psf) to $1,700 psf, compared with $1,700 psf to $2,000 psf last year.

Chief operating officer Cheang Kok Kheong said prices ranged from $1.5 million for a two-bedder to about $2 million for a three-bedder. He said Frasers was aiming to sell the remaining units at $1,350 psf to $1,700 psf.

Other weekend launches include Balcon East in Upper East Coast Road. Tong Eng Group started sales at its 37-unit development on Thursday last week and managed to sell 28 units. Prices ranged from just below $500,000 to $1.39 million, with the one- to two-bedders costing about $850 psf, and three-bedders at $780 psf, said Savills Residential director Phylicia Ang.

Next month, new re-launches could include the 91-unit Nathan Residences in Nathan Road and Frasers' 330-unit leasehold project near the Woodleigh MRT station. The former's preview last September at an average of $2,000 psf met with no success.

Frasers has reconfigured the layout in the Woodleigh project, which previously had 300 units, to accommodate the more affordable one-bedders of 400 sq ft. The rest will be two-, three- and four-bedders. Prices will be 'at the upper end of $750 psf to $780 psf', said Mr Cheang.

There are still many projects waiting to be launched and certainly not all will be on the market soon.

'Those developers who are ready will see this as a good window period to launch, but the really high-end projects won't come out soon,' said Ms Ang.

Developers will launch if they can accept today's pricing, as the recent re-launches are easily 25 per cent to 30 per cent below the peak, said Knight Frank executive director Peter Ow.

'Much Uncertainty' In Real Estate

Source : The Straits Times, May 28, 2009

GIC Real Estate president Seek Ngee Huat believes the global property sector still faces much uncertainty and that more distressed assets in the developed world are likely to emerge in the next two years.

Real estate values in developed markets have been written down rapidly due to falling rents and rising capitalisation rates.

Further declines are expected, particularly as investors who face refinancing difficulties are forced to sell their properties, Dr Seek told an audience at the National University of Singapore's Institute of Real Estate Studies public seminar at InterContinental hotel yesterday.

Professor Joseph Gyourko of The Wharton School, University of Pennsylvania, said: 'There's a lot of debt coming due across all sectors in the United States.'

He said housing prices should stabilise in the bubble markets of the US sunbelt region such as Arizona but sharp price downturns in key coastal markets including New York City can be expected this year.

'Deleveraging has begun in earnest in the West and we are yet to see the full impact of that on commercial real estate,' he said. 'The next five years are looking even more challenging than what we have just gone through in the debt market.'

A number of over-leveraged markets have yet to bear the brunt of maturing debt that will occur in the next one to two years, said Dr Seek. Distressed private equity has yet to surface, he added.

Most of developing Asia has been hit by contracting demand but fortunately, as it is not as overly leveraged as the US, it will probably not suffer massive writedowns and depressed values, he said.

There are positive signs of financial markets stabilising but it is too early to tell if the global economy is out of the woods yet. 'Until we see a sustainable economic recovery... (only then) will growth and rents rise again,' said Dr Seek.

'Opportunities abound, more immediately in undervalued Reits and distressed debt, and perhaps in the next year or two, in undervalued or distressed assets particularly in the developed world,' he said.

Reits, or real estate investment trusts, without a sound asset base and manageable debt levels will continue to languish, and eventually some will fall or be absorbed. 'I certainly do not want to leave you with the impression that real estate, even in developing Asia, is already on a growth path. There are still a great deal of uncertainty,' said Dr Seek.

US Recession Could End In Next Quarter

Source : The Straits Times, May 28, 2009

Govt stimulus spending and Fed efforts paying off, key survey shows

WASHINGTON: - The US recession will probably end in the third quarter of this year, a key survey of business economists showed, even as rising joblessness indicates the recovery will be weaker than previously estimated.

The world's largest economy will begin to expand next quarter, according to 74 per cent of leading forecasters in a National Association for Business Economics (Nabe) survey. Compared with Nabe's February poll, growth will be slower and unemployment will be higher in the second half of this year and through 2010.

Government stimulus spending and Federal Reserve attempts to thaw credit markets are helping to pull the economy out of the worst slump in half a century, the survey said. While housing is stabilising, the economists predicted that consumer spending will be restrained by a deteriorating labour market as job losses continue for the rest of the year.

'There are emerging signs that the economy is stabilising,' Mr Chris Varvares, president of the group and of Macroeconomic Advisers, said in a statement. Still, the recovery may be 'considerably more moderate than those typically experienced following steep declines', he said.

The economy will shrink at a 1.8 per cent annual rate from April to June, and then grow at a 0.7 per cent pace in the next three months, the survey showed. Growth will accelerate to a 1.8 per cent rate by the final quarter.

Consumer spending, which accounts for about 70 per cent of the economy, may fall 0.4 per cent this year, compared with a 1.3 per cent drop forecast in the prior poll. Purchases will increase 2.1 per cent next year, less than estimated in February. The Nabe survey, based on the median forecast of a panel of 45 economists, was conducted from April 27 to May 11.

Nine of every 10 participants said the Fed's new credit facilities improved borrowing conditions, and 55 per cent said the programmes also benefited markets that were not directly targeted. At the same time, nearly half the economists said credit was still hard to get.

Home sales may reach a bottom by mid-year, according to 72 per cent of the panellists, and more than six in 10 predicted that housing starts will hit a trough by that time. The survey showed home prices have further to fall, with 40 per cent of the respondents forecasting the declines will continue into next year or later.

Payrolls will decrease by an estimated 4.5 million this year, pushing the unemployment rate to 9.8 per cent by year-end, almost a percentage point higher than the previous estimate of 9 per cent, the survey showed. Job gains next year will help reduce the jobless rate to 9.3 per cent by the end of 2010.

The outlook for business investment this year also soured compared with the February survey, reflecting sharper pullbacks in spending on equipment, software and facilities, and a bigger reduction in inventories. Economists in the survey also predicted corporate profits will decline 16 per cent this year.

The cost of living will fall and worker productivity will improve this year, the Nabe report showed. With inflation in check and unemployment rising, Fed policy makers will keep the benchmark interest rate close to zero until the second quarter of next year, at which time a series of increases may push the rate to 1.25 per cent by year-end. -BLOOMBERG NEWS

Analysts Upgrade Property Stock Calls

Source : The Business Times, May 26, 2009

Private residential prices now expected to rise next year

PROPERTY analysts now expect private home prices to climb again next year - a turnaround from previous forecasts that they would continue to slide into 2010 - as there is now a sense that the residential market has hit bottom.

And amid this new- found optimism, analysts' recommendations on several property stocks have been upgraded.

The residential price index chalked up its worst-ever quarterly decline of 14.1 per cent in Q1 2009, according to official figures from the Urban Redevelopment Authority.

'A bottom has been established for the housing market, as price cuts have catalysed latent demand and accelerated inventory clearance, in our view,' said Deutsche Bank analysts Gregory Lui and Elaine Khoo in a note yesterday.

With this in mind, analysts now expect to see the residential price index move up in 2010 - or even as early as the second half of this year.

UBS Investment Research, for one, said in a recent report that there is a possibility of higher prices in H2 2009 and 2010.

'We think it suggests prices are stabilising and could potentially rise 5-20 per cent in 2010, versus our assumption of flat pricing for 2010,' UBS Research analysts Michael Lim and Regina Lim said in a May 19 note.

Likewise, Goldman Sachs is now projecting a 5 per cent gain in private home prices next year, reversing its previous forecast of a 10 per cent fall in 2010.

'The recent pick-up in transaction volumes in the primary residential market is a harbinger of price stabilisation being just around the corner, in our view,' the bank said in a May 12 report.

Price increases could already be on the way - recent reports have indicated that developers are already raising prices of select units by 2-5 per cent where demand seems resilient.

The price creep is difficult to ascertain, UBS said, but it estimates that up to six months ago, early-bird discounts were a permanent feature for new launches. 'Developers have since limited the discount duration to the initial launch,' it said. 'We think this is a positive development, though unexpected, and suggests a high probability of a meaningful recovery in H2 2009.'

The drop in prices in Q1 meant that transaction volume showed a significant increase. More than 1,200 homes were sold each month in February, March and April - after just 108 homes were sold in January.

'In our view, the strong momentum suggests buyer confidence is returning and could provide the next wave of momentum for developer stock prices,' said UBS. And developers are in stronger positions after inventory clearance this year and cash calls, noted Deutsche Bank.

UBS's analysts issued a 'buy' call on City Developments. 'We believe City Developments would be a key beneficiary as it has the largest market share in residential sales volume in Singapore, and its share price is strongly correlated to resale transactions,' said the bank's analysts.

Goldman Sachs likewise upgraded CityDev to 'buy' from 'sell'.

Deutsche Bank also yesterday upgraded two developers from 'hold' to 'buy' - Keppel Land and Allgreen Properties.

However, while upbeat on the residential sector, analysts said the outlook for the office sector is less rosy. Deutsche Bank, for one, expects vacancies to approach 17 per cent in 2012. While the rental decline will decelerate sharply in H2 2009, any recovery is likely to lag, the bank said.

Developers Dangle Rent Guarantees

Source : The Business Times, May 26, 2009

Buyers respond well to scheme introduced at some projects

Some developers here are turning to rental guarantees to lure buyers in the current down-market.

Under such schemes - which are offered only for certain units within selected projects - developers help buyers secure tenants, and also ensure that the owner gets a minimum pre-determined yield.

Quick sale: Investors snapped up units at Gallop Gables after Straits Trading offered a two-year guaranteed rental yield of 7 per cent on 10 units there in April. All 10 units sold in three days

Far East Organization, for example, offers rental guarantees for selected units in selected projects such as Orchard Scotts, Vida, River Place, Tanglin View and Icon.

'Through our marketing efforts over the years, we found that investors do not have the time to lease out or manage the tenancy of their apartments that they have bought from us,' said Chia Boon Kuah, chief operating officer for property sales at Far East Organization.

'Therefore, in 2006, we rolled out the rental guarantee scheme to assist our investment buyers in leasing out their properties. With our own in-house leasing and estate management teams, we are able to provide a seamless one-stop service to our buyers.'

For Vida, which is located in Cairnhill Rise, Far East is now offering a guaranteed rental yield of 5 per cent a year. This, according to Far East, can potentially work out to a return on invested equity of about 10-13 per cent a year.

'Vida is a superior investment as we are offering a yield or return on invested equity of around 10-13 per cent per annum,' said Far East in a recent letter to potential buyers.

Several other developers are offering schemes along the same vein.

At Belle Vue Residences, Wing Tai Holdings is offering a guaranteed return of 20 per cent on the downpayment a buyer makes if he picks up a unit using the deferred payment scheme. (DPS). Under the scheme, the buyer will have to pay 20 per cent of the property's price as the downpayment. For a property worth $4 million, for example, this works out to $800,000.

But under Wing Tai's scheme, he will get some of that money back.

Buyers who use the DPS to buy units in Belle Vue will get a guaranteed income of 10 per cent a year for two years on their downpayments. The guarantee will kick in once Belle Vue receives its temporary occupation permit (TOP) at the end of 2010. Using the same example as earlier, the buyer will get some $160,000 two years after TOP.

Market watchers said yield guarantee schemes are generally well-received in a down-market.

Investors, for example, snapped up units at high-end residential development Gallop Gables after The Straits Trading Company offered a two-year guaranteed rental yield of 7 per cent on 10 units there in April. All 10 units at the freehold Farrer Road estate sold in three days.

Elsewhere, at its preview for The Mezzo, Soilbuild Group Holdings offered a 6 per cent annual rental guarantee for two years, apart from the interest absorption scheme. The rental guarantee kicks in right after the TOP date. Soilbuild said recently that the launch of the first phase of The Mezzo was 'met with an encouraging response'.

Market sources told BT that at least a few more new upcoming projects will offer variations of such schemes. Developers have historically offered such schemes to entice buyers when the property market is weak.

Hong Leong Group's 71-unit luxury development Cuscaden Residence had such a scheme when it was launched in 2004 shortly after the Sars scare. Wing Tai Holdings also offered something similar for Duchess Crest in Bukit Timah in 1998, during the Asian financial crisis.

However, yield guarantees are a popular option for developers, said Joseph Tan, CB Richard Ellis' executive director for residential. This is because such schemes force developers to manage units once they have been sold.

A check with Singapore's three largest listed developers - CapitaLand, City Developments and Keppel Land - showed that none of them are currently offering any kind of rental guarantee schemes.

Units with yield guarantees could also come at a higher price, said Peter Ow, executive director for residential at Knight Frank. For example, developers who offer the interest absorption scheme at their properties usually charge a price premium of 2-3 per cent for units sold under the scheme, Mr Ow pointed out. This is because the developers have to absorb the interest costs that would otherwise have been borne by the buyers. The same principle applies for units offering yield guarantees, he said.

M'sian Economy On The Road To Recession

Source : The Business Times, May 28, 2009

GDP shrinks for first time in years; exports battered

THE Malaysian economy shrank 6.2 per cent in the first quarter - its first contraction since 2001 - and there were signs that the decline would continue through the second quarter. This could push the country towards its first recession in a decade.

The worse-than-expected deterioration came as nearly all sectors - bar construction - reported sharp falls amid collapsing global demand. The manufacturing sector was the hardest hit, falling nearly 18 per cent.

In the fourth quarter of last year, the economy had managed a marginal gross domestic product (GDP) growth of 0.1 per cent; and quarter-on-quarter, the decline was about 7 per cent.

Bank Negara governor Zeti Akhtar Aziz said that there were signs of improvement in May - retrenchments have stabilised, bank lending has expanded by 10 per cent and commodity prices have strengthened - but only expected to see 'significant improvement' in the third quarter, the extent of which mainly depends on the pick-up in the external economy. But she was confident that the economy would expand in the final quarter.

A recession had loomed inevitably since late last year and in the coming days, Prime Minister Najib Razak is expected to revise the official full-year GDP forecast to a contraction of between 2-3 per cent from between one per cent to negative one per cent.

While the export-oriented sectors suffered - electrical and electronics shrinking 41 per cent year-on-year - the domestic-oriented sectors also declined by 16 per cent owing to the weakness in the consumer and construction related sub-sectors.

Aggregate consumer demand was down almost 3 per cent and private sector consumption - a previous mainstay of the economy - shrank 0.7 per cent from a growth of 5.3 per cent in the quarter before as consumers held back spending on fears that the economy would worsen and jeopardise jobs.

Even the normally reliable services sector fell into negative territory - albeit a marginal 0.1 per cent - as the sharp contraction in the trade services of utilities, transport and storage, and real estate offset the gains in the area of communications and other services.

Although public sector spending brought some support, the near 11 per cent drop in fixed capital formation revealed that planned projects had been slow in getting off the ground.

Even so, Ms Zeti noted that the economy was robust enough to weather the downturn. Inflation has moderated to about 3 per cent currently, while the trade surplus for the first quarter remains strong at RM33 billion (S$13.7 billion), with total external debt at RM244 billion or some 35 per cent of gross national income.

Net outflows of portfolio investment funds had further moderated to RM9.5 billion in the first three months of the year from RM25 billion in the fourth quarter, while net overseas investments by local firms - mainly in services - had also slowed to RM3 billion.

On Moody's placing of nine Malaysian banks on review watch with the possibility of a downgrade, she observed that the rating agency had previously been 'proved to be so very wrong', in the Asian financial crisis for example, in over-estimating by double the amount need by the country to recapitalise its banks.

In the current crisis, unlike the West, the Malaysian banking system was not in need of shoring up, and the RM67 billion in fiscal stimulus to date was to arrest the slump by stimulating economic activity.

Although the massive spending had blown the budget deficit to 7.6 per cent of GDP this year, Ms Zeti said that it was necessary to support the economy in these 'exceptional circumstances'.

She expects corporations to take over the reins soon, pointing to interest rates which are at historical lows.

'State intervention can only be temporary. Going forward, next year the government can gradually exit from the fiscal stimulus, while the private sector can assume greater responsibility.'

US Recession To End In Second Half: Survey

Source : The Business Times, May 28, 2009

But forecasters see lacklustre rebound posting meagre 1.2% annual pace

(WASHINGTON) The reeling US economy is poised to emerge from recession in the second half of the year, but recovery will be lacklustre, a survey of economic forecasters showed yesterday.

The National Association for Business Economics (NABE) said a survey of 45 professional forecasters found that the consensus believed the end of the prolonged recession that began in December 2007 was finally in sight.

'While the overall tone remains soft, there are emerging signs that the economy is stabilising,' according to NABE's latest survey and its president, Chris Varvares.

'The survey found that business economists look for the recession to end soon, but that the economic recovery is likely to be considerably more moderate than those typically experienced following steep declines,' said Mr Varvares, who is president of Macroeconomic Advisers.

Subscribing to the same view, prominent economist Martin Feldstein told Reuters in Athens that the United States may not see a sustainable recovery before next year even if there is positive growth in the second quarter.

'I still hold the view that a sustainable recovery in the United States will start in 2010, if we are lucky,' said Mr Feldstein, a Harvard University professor who sits on US President Barack Obama's Economic Recovery Advisory Board.

'We may see some positive growth in the second quarter but it will not be the beginning of a sustainable recovery,' he said in an interview on the sidelines of an economic conference in the Greek capital. 'When we look at Q3 and Q4 what we still see is weak exports and consumers raising their savings rate.'

The Economic Recovery Advisory Board was tapped by Mr Obama to help shape his response to the economic crisis.

The NABE outlook showed that panellists expected gross domestic product (GDP) to shrink by 1.8 per cent in the second quarter.

But the NABE panel, in the survey taken between April 27 and May 11, downgraded the outlook for the next several quarters.

The panellists said a sharp pullback in business investment was stoking near-term weakness, and cited rising government spending as a 'vital support' to the ailing economy.

The consensus forecast continued to see a 'modest' rebound in the second half, beginning in the third quarter, 'followed by steady improvement', NABE said.

But overall the lacklustre rebound was expected to post a meagre 1.2 per cent annual pace, 'well below trend', in the second half of the year.

That would include growth of 1.0 per cent in the third quarter and 2.1 per cent in the fourth quarter.

For 2010, meanwhile, the NABE pegged average growth at just 2.0 per cent, down from its earlier projection of 2.4 per cent growth.

NABE said the key downside risks continued to loom large: steep job losses, extremely tight credit conditions and falling home prices.

'These same forces are causing consumers to remain cautious, a feature that NABE panellists think is here to stay,' the association said.

Consumer spending is considered key to economic recovery since it represents about two-thirds of US output.

The NABE panel predicted that labour market conditions would deteriorate further, but the pace of job losses would decline through the rest of the year.

'A total of roughly 4.5 million jobs are expected to be lost in 2009, driving the unemployment rate to 9.8 per cent by year-end,' NABE said.

The panellist projected 'modest' job gains in 2010 that would trim the unemployment rate to 9.3 per cent by the end of next year. -- AFP, Reuters

Home Resales Gain 2.9% In April

Source : The Business Times, May 28, 2009


(NEW YORK) Home resales in the United States gained in April as foreclosure auctions and improved affordability spurred bargain hunters.

Purchases increased 2.9 per cent to an annual rate of 4.68 million, close to forecasts, from 4.55 million in March, the National Association of Realtors (NAR) said yesterday in Washington. The median price slumped 15 per cent from a year earlier, the second-biggest drop on record, and distressed properties accounted for 45 per cent of all sales.

Record-low mortgage rates, tax credits and falling prices may keep boosting demand and trim the glut of unsold homes. In turn, a pick-up in sales will help stem the slump in property values, which is key to shoring up household finances and construction as the economy begins to emerge from the recession.

'An increase in affordability has seemingly enticed potential homebuyers,' Michelle Meyer, an economist at Barclays Capital Inc in New York, said before the report. 'We believe home sales have stabilised.'

Economists forecast resales would rise 2 per cent to a 4.66 million annual rate from a previously reported 4.57 million pace in March, according to the median of 72 projections in a Bloomberg News survey. Estimates ranged from rates of 4.47 million to 4.8 million. Sales were down 3.5 per cent compared with a year earlier.

The number of houses on the market climbed 8.8 per cent to 3.97 million in April, reflecting the gains usually associated with this time of the year, NAR said. At the current sales pace, it would take 10.2 months to sell those homes, up from 9.6 months in March.

Resales of single-family homes increased 2.5 per cent to an annual rate of 4.18 million. Sales of condos and co-ops rose 6.4 per cent to a 500,000 rate.

The gain last month was led by a 12 per cent jump in the Northeast and a 3.5 per cent gain in the West. Purchases also climbed in the South and fell in the Midwest.

Foreclosure filings in the US rose to a record in April for the second consecutive month, Realtytrac Inc, a seller of foreclosure data, said on May 13, as the jobless rate climbed to its highest in more than a quarter century. Foreclosure filings jumped 32 per cent from a year earlier, the group added.

The share of distressed sales last month was down from March, reflecting normal volatility, NAR said. First-time buyers accounted for about 40 per cent of April sales, also down from March, the group noted.

Still, 'it's a non-regular market in terms of so much distressed sales activity', Lawrence Yun, chief economist of the agents group, said in a press briefing. The market is led by gains in sales of lower-priced properties, while there is 'very little' activity at higher price points, Mr Yun said.

Multiple bids are now common on foreclosure sales, while properties selling for US$750,000 or more are taking 40 months to sell on a median basis, Mr Yun said. Higher mortgage rates for jumbo loans are one reason for the disparity, he added. - Bloomberg

Genting Again Rocks The Boat At Sentosa

Source : The Business Times, May 28, 2009

Move to sell 9% stake means more probity checks prior to licence award

With only months to go before the casino at Resorts World at Sentosa opens, Genting Singapore seems prepared to gamble with its casino licence again by making the regulatory probity process more complicated.

Pansy Ho: US gaming officials have recommended that MGM Mirage cut ties with its partner Ms Ho. Genting Group is said to have bought secured notes from MGM

In a statement released yesterday, Genting Singapore said that existing shareholders of the company had sold about 850 million shares via a private placing agreement representing a significant stake of about 9 per cent worth over $600 million.

The sale sent the share price plummeting almost 18 per cent to 71 cents, down 15.5 cents from the previous day. Reuters also quoted a term sheet it had seen revealing that the shares were sold for between 72-76 cents per share.

Apart from introducing new shareholders to the fold, there has also been speculation that the Lim family, headed by Lim Kok Thay, may be looking to raise capital for a possible acquisition of MGM Grand Macau. But any new significant shareholders in the company here will be scrutinised by regulators.

In response to an SGX query, Genting Singapore said: 'The respective substantial shareholders will in due course be releasing the relevant Notice of Substantial Shareholder's Change in Interests/Cessa- tion of Interests (as the case may be).'

The sale of shares was done through Golden Hope Ltd and Lakewood Sdn Bhd, vehicles that are understood to be controlled by the Lim family which owns Malaysian gaming firm Genting Bhd, the parent of Genting Singapore.

All significant shareholders of Genting Singapore will be expected to undergo strict probity checks before the gaming licence is awarded to the casino operator here by the Casino Regulatory Authority (CRA). It is understood that the gaming licence has not been awarded yet.

Speculation on the Macau deal was fuelled when it was revealed on Monday that Genting Group had acquired US$100 million in secured notes from MGM Mirage.

The talk of a divestment of MGM Grand Macau was itself sparked when the New Jersey Division of Gaming Enforcement recommended last week that MGM Mirage sever ties with Pansy Ho, its partner for MGM Grand Macau, adding that the daughter of Chinese gaming magnate Stanley Ho is an unsuitable partner.

Bloomberg had quoted Ang Kok Heng, chief investment officer at Phillip Capital Management in Kuala Lumpur, as saying that the Lim family may be raising funds to finance a possible investment in MGM Mirage's Macau casino. But he also added: 'It's not easy for Genting or Resorts World Bhd to take over MGM Mirage's venture in Macau because of their investment in Singapore. There's a likelihood the Singapore government may not agree, so the family has to come in on their own.'

This is not the first time Genting Singapore has raised eyebrows in Singapore by associating itself - perceived or otherwise - with Stanley Ho.

In 2007, after winning the tender to build one of two casino resorts in Singapore, Genting Singapore said it was looking to sell a stake in Star Cruises - which was then its partner in the Sentosa resort - to Stanley Ho. Genting Singapore later had to backtrack on this and subsequently acquired Star Cruises' entire stake in the resort in an apparent bid to pacify the Singapore government.

Don't Assume Crisis Over: BOE's Blanchflower

Source : The Business Times, May 28, 2009

LONDON - The world should not assume that the worst of the global economic crisis is over, Bank of England monetary policy committee member David Blanchflower said in comments published on Thursday.

'My worry is that there can be many false dawns and we shouldn't just assume that everything is over,' the usually dovish economist told The Times newspaper.

'We have to have a rethink. You're going to have to throw away lots of economics and start again. How can anybody not say that when we've had the greatest financial crisis in 100 years.'

Mr Blanchflower, who steps down from the MPC at the end of this month, said that while he had long been a lone voice calling for rate cuts on the BOE's rate setting committee, he had taken no pleasure in being proved right when the financial crisis hit.

'I don't think vindicated is the right word,' he said. 'It's a smug position. I don't feel that in any way. I was fearful of what was coming and it turns out it has come. And I take no comfort in that.'

'It is hard to feel vindicated when the economy is in a very difficult position and we are faced with a most enormous recession.'

Mr Blanchflower, who started voting for rate cuts in October 2007 as the crisis began to dawn, said that one of his earliest dissenting positions was to argue that there was going to be no explosion in wages as others on the committee were predicting.

'I was a lone voice. Now we are seeing the biggest decline in wages we've ever seen,' he told the paper.

He said the Bank had been too narrowly focused on inflation, which meant that it kept rates high for too long.

'It would have made a substantial difference if we'd been cutting earlier on,' he said.

Despite having carved out a niche as something of a Cassandra - a contrarian who no one believes but who ends up getting it right - Mr Blanchflower said debates on the MPC had always been polite.

'The MPC's greatest strength (is) that one can have a dissenting voice,' he said.

'It was extremely uncomfortable to be in a minority of one for a very long time. The worst bit was in the middle of August last year, feeling completely alone. I was a lone voice, and maybe a lost voice, maybe a lost cause. That was the worst part.' -- REUTERS

US New Home Sales Rose 0.3% In April

Source : The Business Times, May 28, 2009

WASHINGTON - Sales of newly built US single-family homes rose slightly less than expected in April, a government report showed on Thursday, and the previous month's figures were revised down to show a steeper fall.

The Commerce Department said sales rose 0.3 per cent to a 352,000 annual pace, from a downwardly revised 351,000 in March. March sales were revised to show a 3 per cent decline, which had been reported as a 0.6 per cent slide.

Economists polled by Reuters had forecast sales at a 360,000 rate in April.

The median sales price in April fell 14.9 per cent to US$209,700 from a year earlier, the department said. The median marks the half-way point, with half of all houses sold above that level and half below. However compared to March, the median price was up 3.7 per cent, the biggest increase since November.

The inventory of homes available for sale in April fell 4.2 per cent to 297,000, the lowest level since May 2001. April's sales pace left the supply of homes available for sale at 10.1 months' worth, the lowest since a matching reading in July. -- REUTERS